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ENGIE and the energy revolution

Taking place in Barcelona from November 15th to 17th, the European Utility Week brings together the main stakeholders in the energy sector to discuss their means and goals for achieving the energy transition. Thierry Lepercq, ENGIE EVP, will speak at a round table on "Are we ready for the energy revolution?."

He agreed to answer our questions about the next energy revolution.

What is ENGIE’s role in the "energy revolution?"

We should first note that this revolution is taking a shape in ways that are contrary to many popularly expressed opinions. When we talk about the energy revolution, we often think “less energy”, with higher costs and more constraints. For many, this it is the only way to save the planet.

But the development of new technologies is now allowing us to say that the future of energy is the exact opposite! We are moving towards a system where power is much more abundant, much cheaper and can be produced and consumed with many fewer constraints.

Then, we must consider that this revolution has meaning only if it improves people's lives. In Africa, for example, this means the difference between not having access to energy and having it, or being immobile and being able to get around.

Even in developed countries, this revolution will help improve our daily lives. A mobility model created for Brussels in 2040 has shown that the average journey from the center of Brussels to the suburbs will decrease from 40 minutes to 20 minutes.

What changes are taking place that will make this revolution a reality?

Several things are happening at the same time that are giving us the means to implement the energy revolution.

Disruptive economic models involving platforms, for example, like those that are currently disrupting the transportation and hospitality sectors

For us, the energy revolution must lead to what I call the Full 3D: decentralisation/ decarbonization/digitalization.

This will happen along five main axes:

Decentralized energy production. Today, the cheapest, most competitive and most abundant sources of energy are by far solar and wind power. They already cost less than $30 per MWh, which is significantly cheaper than conventional energy sources, and these costs will only fall further thanks to technological innovations such as the flexible solar panels developed by Heliatek, one of ENGIE’s partner startups.

Storing energy in the form of batteries. Changes in the cost and storage volumes are now comparable to that previously affected the solar sector. Over the last 5 years, there has been a 75% reduction in the cost of batteries and a 50% increase in volume every year.

The mobility revolution, particularly the development of electric vehicles and advances that are making them digital. In 2016, there will a million plug-in electric or hybrid vehicles. And the growth curve is 100% per year. All of the conditions for this full-scale change to happen are being met: the availability of vehicles, the deployment of charging infrastructure (there is talk of their being over 1 million charging stations in France by 2020), and evolving legislation such as the inevitable ban of combustion-driven vehicles from city centers.

Connected objects in buildings and homes. There are currently nearly 10 billion connected devices, and their number is increasing by 50% per year. Aside from the cybersecurity issues that need to be addressed, the infrastructure for these connected objects primarily involves telecom infrastructure that is currently being laid out. 12 to 24 months from now, most areas in developed countries will be covered by the necessary infrastructure and solutions will be available to transform buildings into active elements of the electrical system.

The fifth point is fundamental: our ability to switch from one vector to another, transforming the gas into electricity and vice versa. Gas has certain virtues, particularly that it can easily be stored, and electricity is currently the only way to fuel our various electrical devices. This new capability will add value to excess renewable energy production, and opens a huge potential market for hydrogen, both in energy storage and mobility. You can see this in the range extender for electric vehicles developed by SymbioFCell.

If you connect all these points, we get a coherent and balanced system for decentralized energy production, large-scale storage, sustainable mobility, buildings that are made “smart” through connected objects and the use of hydrogen. These revolutionary steps are all underway – or in the case of hydrogen, just starting – which constitute a new system with worldwide business models, and which will require large structural investments.

For me, this is the new model for the future of utilities. To keep up with these changes, conventional utilities have to reinvent themselves. ENGIE has a number of advantages in this regard!

ENGIE is already on top of the technological aspect of of this revolution. It already operates in both gas and electricity. It combines the various components – mobility, buildings, energy production, and services – that are essential and global in their scope.

These features clearly differentiate ENGIE from other energy companies. Thanks to its systemic approach to energy, its ability to contract over a long period with local authorities (through concessions), its truly global presence, its expertise in complex infrastructures, its powerful services business and its culture of partnerships, ENGIE is well-positioned to be a driver of the energy revolution.